Why We Built a Firm That Does One Thing
The Generalist Problem
When a business owner works with a general-practice CPA firm, they get a firm that handles payroll, entity structuring, estate planning, sales tax, and a dozen other things alongside whatever tax credit work comes up for their clients. That breadth is valuable for a load of problems, but R&D tax credits are not one of them.
The research credit under IRC §41 is one of the most fact-intensive provisions in the tax code. Whether an activity qualifies depends on a four-part test that has to be litigated extensively, and the IRS has its own Audit Techniques Guide specific to this credit. This tax credit claim requires a deep familiarity with the qualifying expense categories, the calculation methods, and the documentation standards the IRS expects when it reviews a claim.
A generalist firm that prepares R&D tax credit claims once or twice a year doesn’t build that familiarity. It can’t. And by no fault of their own; they’re just focusing on too many different things, and the volume isn’t there. The results of this are that claims can be undersized, overclaimed in the wrong areas, or documented in a way that does not hold up when the IRS asks questions.
Why We Chose Depth Over Breadth
RK Partners was started because a gap was identified. There are large accounting firms that handle R&D credits as a line item in a broader engagement, and some aggressive shops that maximize numbers without much thought for defensibility. There are also individual CPAs stretched too thin, that are doing everything for a business and simply do not have the bandwidth to add such a time-intensive, detailed project to their queue. Neither of these options fulfill a business owner performing research and development truly needs.
The only way to bridge that gap was to do one thing. Repeat that thing across a wide range of industries with a group of R&D tax credit consultants, tax attorneys, engineers, industry experts, and CPAs that get sharper with every engagement. Our industry knowledge continues to grow, and our team puts together claims that they can stand behind and defend.
The entire attention of the team is laser-focused on just the facts that support an R&D tax credit claim. They understand exactly what needs to be done, and they do it right, every time.
What Specialization Looks Like
Specialization means a few very important things to our clients.
First, it means that the team working on their claims has seen dozens, more, of similar fact patterns before, so that they recognize them efficiently and know how to document them. When a metal fabricator comes to us with custom tooling work, we already know what the IRS challenges in those claims, what documentation will survive examination, and how show those qualifying activities in an accurate and well-supported way.
Secondly, it means that we have a team of tax attorneys, CPAs, engineers, and consultants on the same team, supporting each other and supporting our clients. R&D credits sit at an intersection of tax law, technical work, and financial documentation, and it’s difficult to assess whether an engineering activity meets the experimentation standard without understanding what that engineering work involved, or what it was trying to achieve. That’s why our team is structured the way that it is.
And finally, it means that we’ve found additional credits for clients who came to us after working with another firm who wasn’t structured the same way. The prior firm did nothing dishonest, but they weren’t close enough to the intricacies of the credit to capture everything they could.
The Question We’re Most Often Asked
The most common question we hear from business owners is some version of: But I already have a CPA handling this, why do I need a specialist?
The honest answer is that it depends on what your CPA is doing it. If your CPA has a dedicated R&D practice, a team that works these claims daily, and track record of defending them under IRS scrutiny, you’re likely already in good hands.
If your CPA is running the credit as a side-calculation on a broader return, without the kind of project-level documentation and qualified expense analysis the IRS expects, then there’s a chance you’re leaving money on the table, or sitting on a claim that won’t survive a serious review.
Sometime we reiterate to clients and potential clients daily: we don’t want to replace your CPA. We work with your CPA; in fact, we consider them a vital partner. They know your business and can answer important questions we have, can make sure that we’re interviewing the right people, and can guide us to the correct documentation for many of the activities we’ll be including in your claim. We work with many CPA partners to find valuable credits for their clients.
The Bottom Line
Specialization is not a marketing position, or a decision we made lightly when building this company. We made a structural choice about how to build expertise, and we knew that in order to be the best in the space, we have to focus exclusively on R&D tax credits and nothing else. For R&D tax credits, the difference between a well-documented claim and poorly or under-documented claim can be worth hundreds of thousands of dollars, or the risk of penalty. That’s not a tradeoff worth making. That’s why we built RK Partners the way we did, and it’s why we haven’t changed that focus since day one. We offer free consultations specifically because we want business owners to be aware of every choice. There’s no risk; we genuinely want to make sure that you’re capitalizing on the credit to the most beneficial way to your company.
